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Verizon Wireless does not support the GSM mobile technology, which Cingular and AT&T both support. The iPhone, which is poised as an international phone, uses GSM while Verizon phones use CDMA technology. Some argue that CDMA technology gives better reception and signal strength than GSM. Two years ago when Apple's iPhone was still in development, it was very much possible for Apple to go with CDMA. At the time, Verizon had a much better brand name than Cingular as well, making it a sensible move for Apple to have chosen Verizon as its first choice.

Reports indicated that Apple wanted to receive a percentage of subscription fees from Verizon customers who purchased the iPhone. Apple also wanted complete control over how the iPhone was developed and how it was launched. This did not sit well with Verizon's decision makers. "We said no. We have nothing bad to say about the Apple iPhone. We just couldn't reach a deal that was mutually beneficial," said Gerace.

Mark Siegel from Cingular expressed quite the opposite. "We think this is a win for Apple, and it is a win for Cingular," said Siegel. Apple's 4GB iPhone will launch in July from Cingular with price tag of $499 with a two-year contract. The 8GB version will stand at $599.